Cash flow forecasts

Question 1

Cash sales

Answer 1

The customer pays at the time of purchase

Question 2

Credit sales

Answer 2

The customers pays in a pre-agreed period after the sale, for example 30 days

Question 3

loans

Answer 3

bank loans to fund the purchase of fund the purchase of assets such as machinery and vehicles

Question 4

capital introduced

Answer 4

money invested from entrepreneurs or shareholders when a business is first set up or looks to expand

Question 5

sale of assets

Answer 5

the sales of items owned by the business which are no longer needed in order to bring a short-term cash injection into the business

Question 6

bank interest received

Answer 6

interest paid by the bank on credit balances

Question 7

cash purchase

Answer 7

items purchases by a business and paid for at the time of purchase

Question 8

credit purchases

Answer 8

items purchased by a business and paid for at a later point in time

Question 9

purchase of assets

Answer 9

non-current assets that a business is likely to keep for more than one year such as machinery and vehicles

Question 10

Value added tax

Answer 10

businesses that are VAT registered must pay VAT to HM revenue and customs HMRC and t his should be shown in the cash flow forecast